The new theocratic regime instituted many conservative and often repressive Islamic reforms, as well as engaging in an anti-Western course, in particular against the United States. In 1980 Iran was attacked by neighbouring Iraq and the destructive Iran-Iraq War continued until 1988. In more recent years Iranian politics has seen a dispute between reformists and conservatives over the future of the country.

Since the revolution of 1979 the Iranian head of state is the Leader of the Revolution or faqih, or in absence of a single leader a council of religious leaders. They are elected from the clerical establishment on the basis of their qualifications and the high popular esteem in which they are held. The faqih appoints the six religious members of the 12-member Council of Guardians, as well as the highest judicial authorities and is commander-in-chief of the armed forces.

The president is elected by universal suffrage to a 4-year term by an absolute majority of votes and supervises the affairs of the executive branch. All presidential candidates must be approved by the Council prior to running. After his election, the president appoints and supervises the Council of Ministers (the cabinet), coordinates government decisions, and selects government policies to be placed before the parliament. The Council of Guardians certifies the competence of candidates for the presidency and the parliament.

The unicameral Iranian parliament, the Islamic Consultative Assembly or Majles-e-Shura-ye-Eslami, consists of 290 members elected to a 4-year term. The members are elected by direct and secret ballot. All legislation from the assembly must be reviewed by the Council of Guardians. The Council's six lay-members, all lawyers appointed by parliament, vote only on limited questions of the constitutionality of legislation; the six religious members consider all bills for conformity to Islamic principles. Political parties are technically illegal, though many informal organisations of politically like-minded people exist.

The Iranian landscape is dominated by rugged mountain ranges that separate various basins or plateaus from one another. The populous western part is the most mountainous, with ranges such as the Zagros[?] and Elburz Mountains[?], the latter of which also contains Iran's highst point, the Damavand[?] at 5,607 m. The eastern half consists mostly of uninhabited desert basins with the occasional salt lake[?].

The only large plains are found along the coast of the Caspian Sea and at the northern end of the Persian Gulf, where Iran borders on the mouth of the Shatt al-Arab. Smaller, discontinuous plains are found along the remaining coast of the Persian Gulf, the Strait of Hormuz and the Arabian Sea. The Iranian climate is mostly arid or semiarid, though subtropical along the Caspian coast.

Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. The current administration has continued to follow the market reform plans of the previous one and has indicated that it will pursue diversification of Iran's oil-reliant economy.

The strong oil market in 1996 helped ease financial pressures on Iran and allowed for Tehran's timely debt service payments. Iran's financial situation tightened in 1997 and deteriorated further in 1998 because of lower oil prices. The subsequent rise in oil prices in 1999-2000 afforded Iran fiscal breathing room but does not solve Iran's structural economic problems, including the encouragement of foreign investment.

Most Iranians are Muslims; 89% belong to the Shiite branch of Islam, the official state religion, and about 10% belong to the Sunni branch, which predominates in most Muslim countries. Non-Muslim religious minorities include Baha'is and Zoroastrians, both being religions that originated in Iran, as well as Jews and Christians. Only the latter three are officially recognised minority religions. Iran's population size increased dramatically in the latter part of the 20th century.